Saudi Arabia's consulting market climbs 12 percent to $1.6 billion

Saudi Arabia’s consulting industry continues to shine as one of the world’s standout global performers, growing by 12 percent last year to a worth of $1.6 billion.

The consulting industry of Saudi Arabia has pushed out to a worth of $1.6 billion on the back of bumper 12 percent growth in 2019 – with the Kingdom now accounting for almost half of the wider $3.6 billion market in the GCC. This is the conclusion of Source Global Research, a market research and consultant to the consulting industry itself, which measures the activity of advisory firms with a headcount of greater than 50 serving mid to large clients.

Since rebounding in 2017 – following a couple years of contraction in the wake of plummeting oil prices, which in turn triggered the region’s wide-reaching economic diversification efforts – the Saudi consulting industry has witnessed consistently accelerated growth, capped by a stellar rise of 12 percent last year. Doubts are however growing as to the potential to sustain such impressive growth, with the impact of the coronavirus as yet to be seen.

In addition,  the government last year decreed a ban on awarding foreign-owned consultancies public sector contracts, which has been by far the greatest source of recent growth (now together with the other states of the GCC worth over $1 billion, up by 10.2 percent on the year prior). Nevertheless, the enacting of such a ban remains fuzzy, with Kearney (previously A.T. Kearney) for example recently reported to be working on a new project for the Saudi defence ministry.In conducting its analysis, Source Global undertakes an extensive survey among executives and leaders at top flight consultancies operating in Saudi Arabia and across the GCC (which further includes the United Arab Emirates, Bahrain, Kuwait, Oman and Qatar), and the response this time around was almost unanimous; the Kingdom is currently one of the most important drivers of the region-wide market, which altogether grew at a rate of 9.9 percent last year.

“The market has been kind to us in 2019,” commented Roland Berger’s regional managing partner Rene Seyger. “In the GCC overall, it’s predominantly Saudi Arabia, but there’s also movement in Abu Dhabi.” PwC’s regional consulting leader Waddah Salah, also cited the Kingdom; “We’ve continued to see strong performance in the GCC, particularly in the three key markets of the Saudi Arabia, the UAE and Qatar. I think Saudi Arabia remains the strongest.”

Outside of public sector work, with Source Global describing the Saudi Vision 2030 agenda as perhaps the single biggest driver of demand for consulting help across the region, the development of the local tourist industry has also proven a boon – the Kingdom having only just recently opened up its borders to a wide number of countries, with some 25,000 new visitors flooding in in just the first ten days. Again, the corona pandemic puts that future in doubt.

Overall however, the coronavirus withstanding, Source Global notes that earlier transformation projects in the Kingdom are now spawning follow-up work, with a wide variety of advisory requirements on the table – from in their words strategy development through to implementation of those strategies and quick wins. “Multiple government ministries have become involved in the transformation agenda and are keen to access expert consulting support,” the firm concludes.